Loki Speaks up on Chapter 11 216
The following is an email sent by Scott Draeker of Loki
Dear Friend of Loki:
As you may know, on August 3, 2001, Loki filed a Chapter 11 reorganization. As our valued customer, we wanted to let you know why we have elected to reorganize and how, if at all, it will impact our ongoing business.
Under US law there are two kinds of bankruptcy:
- Chapter 7 is a liquidation. We have not filed a Chapter 7 and have no intention of doing so.
- Chapter 11 is a reorganization. This will allow us to deal with our creditors fairly and equitably and at the same time continue to operate the company. We are still shipping products and porting new games and expect to be doing so for a long, long time.
Most of the debts we are restructuring through the Chapter 11 are well over a year old. They represent mistakes made by a young company. We've learned from our mistakes and become cash positive. Going forward we have every confidence that Loki will continue to be successful and grow.
We cannot say for certain how long Loki will remain in Chapter 11. It depends on many factors. However we do intend to bring the process to a conclusion as quickly as possible. Once our plan of reorganization is accepted by the court, our creditors will receive an agreed upon settlement and all other prepetition obligations will be fully and finally discharged.
During and after the reorganization your orders will continue to be honored. We will continue to provide end user support, bug fixes and new products. Negotiations are in progress to guarantee Loki a steady stream of additional AAA games to bring to Linux.
Most importantly, we'd like to thank each of you for your support over the years. Without our customers, we are nothing. The outpouring of support we have received in the last few days has been overwhelming, and we will continue to do everything we can to merit that support.
Kind regards,
Scott Draeker
President, Loki Software
Re:Don't buy Loki Games (Score:3, Interesting)
According to the article on Linux Today, the "employee" in question was also effectively a huge investor as well. He couldn't just "pack up and leave" because he'd already sunk large amounts of money into the company (including - again according to the claims in the article - paying for Loki's payroll off of his personal credit card! I'd say that, foolish or not, sinking over $100,000 into a company you work for is pretty strong incentive to hang around trying to get it profitable as long as possible...)
Personally, it's starting to sound like the best thing for Loki is to move on, either as a different "legal entity" or not (i.e. have Loki liquidate its assets and have the remaining employees and other interested parties start a new company, buying Loki's liquidated assets) or still as Loki, but with somebody besides Draeker running it.
Loki has it backwards (Score:3, Interesting)
It seems to me that wealth creation could be maximized by doing the exact opposite thing: taking free games for Linux, packaging them, and then selling then to Windows users. What Windows user wouldn't purchase a copy of TuxRacer if he saw it on sale at Best Buy? XBill 2 would likely be a big hit. And think about it: the initial capital outlay is minimal (after all, the games are all free.) I'm willing to bet that we could sell
Loki's heart is in the right place, but if they want to dig themselves out of the hole that they have found themselves in, the best thing that they could possibly do is reverse their name to Ikol and start doing the exact opposite of what they're doing now.
Re:On the other hand (Score:2, Interesting)
Re:I've changed my mind... (Score:2, Interesting)
What does it matter how they "end up" anyway? You'd still own the game (<nitpick> the license </nitpick>), so what would it matter anyway?
Almost all companies in the world started on money financed by personal debt. It would only be stupid if they didn't file for chapter 11 protection before they got in too deep.
Making money (Score:2, Interesting)
Good luck to 'em.
Mordred
Profitability of porting software (Score:3, Interesting)
I've often wondered what the economics of a porting company like Loki are like. For instance Vendor X sells game Y for $49.95 and there are 100,000 potential customers, only 10,000 of them happen to be running a variant operating system that you aren't targeting. However, under further analysis you learn that 9,000 of them dual-boot to your target environment, so they're actually potential candidates anyways. So company Y comes along and offers to port your software for those 10,000 users. Now really despite the fact that it has a potential market of 10,000 users, really 9,000 were potential users already, so the porting is purely a convenience for them, and the 1,000 are truly bonafide new customers.
Anyways you can see how economically this can get pretty convoluted, and it must be under tight terms that porting contracts written: I would presume that for the majority of the prospective market the original game was a candidate already. Bleh.
Re:On the other hand (Score:5, Interesting)
I've been dissapointed by Loki once recently. I was thinking of moving from windows to linux on my home gaming system, figured i'd be able to play tribes 2 in linux, since i had heard it was done. I didn't realize the windows cd isn't patchable (like q3a is). To make things worse, Loki only sells complete CDs, not patches. And after spending 70$ on the win version, i figured i may as well say in win than move to linux and pay it again. If he had, for example, been selling a 15 dollar patch, i may have migrated.
You obviously don't hang out on the Loki newsgroups do you? This must be the most asked, most discussed question on those newsgroups.
Simply put, it doesn't make any financial sense for Loki to do this. Selling games on the Linux platform will, at least for the immediate future, be selling to a much smaller market than the Windows platform. Therefore the economies of scale which allow the cost-cutting seen with Windows games are just not an option for Loki - if every Loki game could be run on Linux by buying the Windows version (often more cheaply) and patching it to run on linux, Loki would not have released as many games as it has and it would be filing for Chapter 7. Bust. Finito. Gone.
Even allowing people to pay purely for the patch rather than new physical media would cut any margins they currently enjoy to nothing. Out of the $15 you propose, you can forget about $10 dollars as tax and payment to the original vendor (id software, Dynamix, etc.) and only leave tiny crumbs for Loki. $35 would probably make about the right margin - you can buy most Loki games for that and get a Linux-specific manual as well.
Have I been disappointed with Loki? No - everything I have bought has run straight out of the box. Most problems are fixed promptly and the installation and patching is an easy, trouble free process. And quite frankly, Urban Terror [urbanterror.net] rocks my world :-)
Cheers,
Toby Haynes
Don't buy Loki Games (Score:2, Interesting)
Yes, it would be nice to have decent games under Linux, but Loki is a terrible company. The creditor that sued Loki and caused this whole situation with them filing for bankruptcy was a former employee whom Loki (Scott Draeker, specifically) robbed blind! He's just trying to get some of the money he invested in the company (while working there for 19 months and not being paid) back.
Support Loki's former employees (hint: all the good employees left the company already), but don't support the company or Scott Draeker.
Re:Reality Bite on Ch. 11 (Score:2, Interesting)
Mind you, a company with a bankruptcy in its history will pay substantially higher interest rates and have its finances put under much closer scrutiny than otherwise, but if the company is otherwise financially sound, and as the letter states, cashflow-positive, there's somebody out there who will lend them money. The question is, how expensive will the credit be?
Delivery Channel (Score:2, Interesting)
ever tried convince your local games shop to order in copies. I really hope they review thier distribution channel while restructuring. After all some of us aren't comfortable ordering merchendise from the internet (and is it any wonder with all the news about computer security problems).
No (Score:4, Interesting)
So, let's say that you buy the right to port title 'A' to Linux for US$200,000 and the right to port a less-popular title 'B' to Linux for US$35,000. You could easily lose money on the first deal and make it back up on the second one, even if it sells fewer copies. Game publishers will charge much more for 'hits' than duds, which is why the ported Linux games are usually pretty good titles, but not the cream of the crop titles (which probably cost much more to port than they could hope to recoup). Certain publishers are very harsh, which is probably why Halflife was never sold at retail....
Basically, the game publishers want money up front and they have no risk. The porting houses take on all the work and risk whenever they port a title; small companies like Loki and Aspyr can be hurt because they have no leverage -- it's a take-it-or-leave-it deal. Also, you probably won't see parity on title releases unless the developers believe in the moral proposition (id and Blizzard seem to be the only companies that do -- and id is the only one that will do it outside of Macintosh), because if the game is wildly successful the pulisher can make more money by squeezing the retail sales than by granting porting rights. After the game's sales dissipate they can get another injection of cash by selling the porting rights to smaller companies and let them assume the risk of sales. Hence, Linux is very tricky to play -- most users can just boot into Windows if they want to play a game badly enough (ahem, CmdrTaco + Diablo).